Prior to the arrival of the European settlers in the 17th century the economy of what was to become South Africa was dominated by subsistence agriculture and hunting.[1]
In the north, central and east of the country tribes of Bantu peoples occupied land on a communal basis under tribal chiefdoms. It was an overwhelmingly pastoral economy and wealth was measured in the number of cattle men held.[citation needed] Population growth had created a land pressure that had seen the tribes move steadily from the origins in central east Africa.[citation needed]
In the southern and western parts of the country, San (Bushmen) peoples led nomadic lives based on hunting and the Khoikhoi (Hottentots) peoples led a pastoral existence.
In the first half of the 20th century, agriculture and mining were the largest parts of the South African economy.[2]
Early history
The first evidence of pottery and agriculture (sheep) in South Africa can be found in the period of 350-150 BCE, while metals date back to the 52-252 CE period.[3] The earliest occurrence of cattle farming was in the 5th century CE and the Iron Age reached modern-day Kwa-Zulu Natal around 700 CE.[3]
The Kingdom of Mapungubwe (c.11th – 13th century CE) was a medieval state in South Africa located at the confluence of the Shashe and Limpopo rivers. This saw the beginnings of South Africa's gold and ivory trade[4][5] and the production of jewelry and art. The Golden Rhinoceros of Mapungubwe was discovered on a royal grave at the site of Mapungubwe Hill, and was on display at the British Museum as part of an exhibition celebrating the art of South Africa.[6] Mapungubwe also saw the first development of stonemasonry in what is now South Africa.[4] Glass beads and Chinese ceramics were imported.[7]
To deal with the problems, the company established a garden at the foot of Table Mountain and bartered cattle from the Khoikhoi to supply to passing ships.
However, the inevitable development of a permanent European settlement at the Cape triggered profound change over the next two and a half centuries. A struggle developed between the Europeans and the San, who were pushed into the Kalahari Desert region. Protracted skirmishes and wars with the Khoikhoi (Quena) clans and tribes resulted in enslavement of many and the destruction of a cohesive Khoikhoi communal identity, which disappeared.
Land hunger [citation needed] led to wars between the Bantu as the settlers migrated eastwards from the original settlement in Cape Town [citation needed].
Between the wars [citation needed], commerce developed between the settlers and the indigenous peoples. Sales of produce and stock saw the development of a black, landed peasantry. [citation needed].
Immigrant skills
The Europeans meanwhile imported slaves from Malaya as artisans. Their skills have contributed to the clothing being a major industry in the Cape today. There were other waves of migration from Europe. Persecuted Huguenots from France turned their hands to wine production and Germans and British grew the nascent industrial base and developed modern farming methods. Contrary to popular belief, slaves did not heavily work the farms of the Cape, as that was done contractually by the Khoi, but mostly by the Dutch settlers. Slaves were also imported to the South African region for work on the large scale wine plantations founded by European settlers. Altogether these ambitious efforts increased living standards of the white population substantially.[9]
The province of Natal, a British colony, was found suitable for sugar production but the local Zulu tribes could not be attracted as cane cutters as they lacked the skill and competency to work. Indentured labour was brought from India. The descendants of these labourers play an active role in commerce and industry today.
Additional to slavery, there was another form of coerced labor supply: The Zulu and other kingdoms used young men for coerced labor both as warriors and pastorals.[10] The European migrants diverged: the Continental Europeans merged to speak a Dutch-derived language, Afrikaans, and the settlers from the British Isles continued to speak English which became the language of commerce. This dichotomy was also seen in the economy, as farmers were mainly Afrikaans-speaking while English-speaking South Africans were drawn to commerce and industry.
The discovery of diamonds in the Cape Province in 1866 the discovery of gold twenty years later on the Witwatersrand in the ZAR transformed the economy and attracted considerable foreign interest. The subsequent diamond and gold rushes saw further migrations of a range of nationalities including Cornish miners and eastern European Jews amongst others.
In 1899, the British went to war once again with the Boer Republics. After overcoming several initial setbacks, the British managed to take the initiative by 1900; invaded and soon conquered the Freestate and ZAR, later uniting them as two of the four provinces in the Union of South Africa in 1910.
But perhaps the greatest impact was the influx of international capital to finance the mining operations, including the arrival of Cecil John Rhodes who formed De Beers and Anglo-American. During the age of African colonization, due to its large amount of gold and diamond mines, South Africa attracted the majority (55,8%) of overseas investments to the whole African continent.[11]
The indigenous people had no knowledge about the mining economy and this led to a shortage of labour on the mines. In a measure to force labour to the mines, Rhodes, who had turned from forming the De Beers Company to politics, secured the passing of the Glen Grey Act in 1894. The Act obliged the payment of tax with the specific aim of forcing peasant farmers, who were not part of the money economy, to find work that paid money to pay the taxes. The Act was a deliberate move by Rhodes to force labour to the mines.
This was the start of a migratory labour system in which black men travelled to the mines to work leaving their families in the tribal areas.
The supply of labour became more than sufficient and the mining companies formed a buying cartel through their association, the Chamber of Mines. This enabled them to create a monopsony (market conditions where there is only one buyer) that suppressed wages. The mines also attracted labour from neighbouring countries such as Rhodesia (now Zambia and Zimbabwe), Nyasaland (now Malawi) and Mozambique (that was then a Portuguese colony) that kept wages of black workers down.[12]
Rand Rebellion
South African gold mines are deep and expensive to run and the mine companies endeavoured to keep costs down. However, in trying to train blacks for skilled jobs, they ran into conflict with white miners. The white miners resisted the integration of black miners in 1922 in the area around the centre of gold mining: the Witwatersrand.
The dispute quickly escalated with the South African Communist Party joining on the side of the miners while also promoting the idea of racial equality. The standoff escalated from a labour dispute to a full scale uprising labeled the Rand Rebellion. Eventually more than 20,000 fully equipped Union Defence Force troops had to be dispatched. All attempts at negotiations failed and the rebellion was eventually put down by "considerable military firepower and at the cost of over 200 lives".[13] Some white miners were sentenced to hang for their roles in instigating and leading the uprising. Those dispatched to the gallows purportedly went quoting the rallying cry of Karl Marx and Friedrich Engels's Communist Manifesto, saying, "Workers of the world unite". [citation needed]
Among the white population there were many Afrikaner sharecroppers (tenant farmers who shared their crops with their landlord in lieu of rent). However, the onset of the Great Depression, combined with drought, led to the forced sale and consolidation of many of these farms, which itself led to the eviction of the residential sharecroppers. These subsequently unemployed whites flooded towns, competing with blacks for jobs in the mines. [citation needed]
Special attention was paid to this new influx of white poverty (as opposed to any changes in non-whites' statuses), and the Carnegie Corporation, founded by Scots-American philanthropist Andrew Carnegie, conducted a study into white poverty that was published as the Commission on the Poor White Problem in South Africa in 1932. It led to the alleviation of white poverty, but to some it was also seen as the foundation for the formalised system of racial discrimination against blacks that became known as apartheid. [citation needed]
Blacks had no vote and the whites used their political power to force the mining companies to protect skilled jobs for whites.
From the late 1920s, whites elected governments that united white labour and Afrikaner Nationalism that used sanctions such as denying government contracts, against businesses that did not employ people who spoke Afrikaans. Nationalised industries were established, like steel and the railways, which reserved even low skilled jobs for whites.
The 1930s and 1940s saw the rapid industrialisation of the country as it supplied the mining industry and the government invested in major projects to protect white employment. South Africa not only had gold and diamonds but vast quantities of iron, coal and many other minerals. Agriculture diminished in importance as mining and then industry grew.
While English-speaking South Africans dominated industrial and commercial life Afrikaners banded together in mutual financial organisations that in due course were to become major players in that sector of the economy. [citation needed]
Apartheid
In 1948, a government was elected that introduced the policy of apartheid (segregation) that was aimed to allow different racial groups to progress in their own separate areas. In the two decades following the rise to power of the National Party, whites (particularly Afrikaners) rose above all other ethnic groups in South Africa through their dominant and tactful performance in the labour market. Throughout the 1960s, South Africa had economic dominance over the rest of Africa and was considered the only developed country in Africa by the United Nations economic criteria.[14]White South Africans enjoyed standards of living comparable with or higher than the West.[15] Throughout this period South Africa produced twice as much electricity and six times as much steel as the rest of the African continent combined while at the same time, accounting for 43% of Africa's entire mineral production output.[14]
Economic dominance during this period was made possible by Black South Africans and migratory labour from Malawi, Lesotho and Portuguese Mozambique who all experienced poor working conditions and relativity low wages.[14]Real wages for nonwhite South African miners declined between the passage of the Mines and Works Act in 1911 and 1971, while nonwhite workers in the manufacturing industry earned 18 percent of the wages of white workers.[15] The government at the time even admitted that Black labour was crucial to their economic success and hence talks of territorial and political separation along racial lines at the time was deemed a threat to economic expansion for South Africa.[14] By the beginning of the 1980's South Africa had the highest wealth inequality in the world, with 40 percent of the population earning just 6 percent of the national income. Infant mortality rates for blacks and Coloureds reached 13 times the rates of whites, with one-quarter of newborns dying within a year.[15]
As noted by one historian, "Full employment, in combination with labour controls, limitations on the free movement and employment of non-whites, and the use of colour bars at company level, contributed to high levels of disposable income for the white population".[16]
Many English-speaking South Africans had participated in the heavy discrimination that preceded apartheid, and tacitly supported the legislation while paying lip service to opposing the laws. By so doing apartheid managed to create a system in which black people were pushed to the margins of their land through the imposition of the Natives Land Act, 1913. In result; many blacks are unskilled, illiterate, and have low living standards. Their schooling system, the Bantu languages education, was based on the notion that black people cannot progress fast enough in scientific subjects due to lower intellectual skills, and has resulted in many being excluded from work requiring skill. [citation needed]
Volkscapitalisme
Under the Nationalist Party, the country embarked upon a dirigiste program of economic expansion involving the creation of several state-owned enterprises (or “parastatals”, as they were called), including Iscor (steel), Sasol (synthetic fuel), Eskom (electricity), and later Transnet (rail), and Telkom (telecommunications). These grew in tandem with party-controlled entities such as Volkskas (banking), Sanlam (insurance) and Naspers (media).[17]
Business support for apartheid
With the support of foreign capital, the mines and the mining finance houses, largely dominated by English-speaking South Africans, prospered under the system of apartheid and shunned outright opposition. In return for the continued monopsony of labour purchase for the mines that kept wages low and outlawed trade unions, the English-speaking mining companies tolerated job reservation that prevented blacks from developing skills. [citation needed] Thousands of foreign businesses from the United Kingdom, West Germany, and the United States opened firms in South Africa to exploit the lower wages of nonwhite workers.[15] This is debated, however, as policies to restrict labour supply to whites only resulted in higher miner wages than under a system of equal employment.
Over time the mining companies introduced changes to lower their costs but the alliance with the government continued. [citation needed]
White trade unionism was allowed but there were no black trade unions until the 1970s.[18]
The imposition of international sanctions on the country began economic pressure that saw the unravelling of apartheid. There were oil sanctions but South Africa continued to be able to buy oil on international markets and developed technology that allowed the conversion of coal into oil.[citation needed] A small gas field was discovered off the coast of the Cape.[citation needed]
But the most damaging isolation was the denial of investment funds and the boycott of South African investments particularly by influential universities and foundations in the United States. These boycotts limited the capital available to South African businesses.
Ironically, during the 1980s gold reached its highest price as a result of international tensions reaping huge profits for the mining company conglomerates.[citation needed] However, because of currency restrictions and bans on the sales of Krugerrands in some countries, they were unable to invest abroad. The result was that they used their surplus funds to buy up businesses in virtually every activity in the economy.[citation needed]
However, the financial benefit for the mining companies of continuing to support the system eroded as international capital stopped flowing into the country.[citation needed]
Despite some fears that the country could become unmanageable because of tribal conflict or even a military take over by the white-dominated armed forces de Klerk and Mandela guided the country to democratic elections in 1994 with Mandela as president.
In January 1991, SACP general secretary Joe Slovo, DP Finance Spokesman Harry Schwarz and Deputy Finance Minister Org Marais, debated the state's role in a post-apartheid economy, in an historic debate organised by the Institute for a Democratic Alternative for South Africa.
At the same time they embarked on the Reconstruction and Development Plan to improve services including housing, education and health to blacks only as a means to achieve equity. [citation needed]
The ANC also initiated a system of "black economic empowerment" which its aim was to establish equity to the previously disadvantaged races and the race that is currently disadvantaged through affirmative action.[19]
A major source of stress remains the redistribution of land. Under apartheid legislation beginning with the Natives Land Act, 1913 73% of land was in so called "white areas" and many blacks had been uprooted and removed to previous tribal areas to keep crime and vandalism away from important land.
The slow legal and bureaucratic process of restitution is causing impatience among blacks and concern among white farmers that South Africa may go down the route of neighbouring Zimbabwe where land is being unilaterally seized by the government and its supporters, causing food shortages as the new owners tend to have less farming experience.[citation needed]
First-world infrastructure
The needs of the mines to maintain internal security under apartheid had seen parts of South Africa develop an infrastructure that was sufficient to cater to business in the cities and as a connection between provinces (states). This has served the country well in the post apartheid years but is going to waste as infrastructure has not been well maintained by the ruling government.[citation needed]
The economy of South Africa is the second largest in Africa and the most industrialized, technologically advanced, and diversified economy in Africa. South Africa is an upper-middle-income economy, one of only eight such countries in Africa. Following 1996, at the end of over twelve years of international sanctions, South Africa's nominal gross domestic product (GDP) almost tripled to a peak of US$416 billion in 2011. In the same period, foreign exchange reserves increased from US$3 billion to nearly US$50 billion, creating a diversified economy with a growing and sizable middle class, within two decades of ending apartheid.
The very first modern humans are believed to have inhabited South Africa more than 100,000 years ago. In 1999, Unesco designated the region the Cradle of Humankind World Heritage site. South Africa's first known inhabitants have been referred to as the Khoisan, the Khoekhoe and the San. Starting in about 1,000 BCE, these groups were then joined by people who migrated from Western and Central Africa during what is known as the Bantu expansion southwards through Africa.
The Transvaal Colony was the name used to refer to the Transvaal region during the period of direct British rule and military occupation between the end of the Second Boer War in 1902 when the South African Republic was dissolved, and the establishment of the Union of South Africa in 1910. The borders of the Transvaal Colony were larger than the defeated South African Republic. In 1910 the entire territory became the Transvaal Province of the Union of South Africa.
Coloureds refers to members of multiracial ethnic communities in Southern Africa who may have ancestry from more than one of the various populations inhabiting the region, including African, European, and Asian. South Africa's Coloured people are regarded as having some of the most diverse genetic backgrounds. Because of the vast combination of genetics, different families and individuals within a family may have a variety of different physical features.
Hendrik Frensch Verwoerd, also known as H. F. Verwoerd, was a South African politician, scholar, and newspaper editor who served as Prime Minister of South Africa and is commonly regarded as the architect of apartheid. Verwoerd played a significant role in socially engineering apartheid, the country's system of institutionalized racial segregation and white supremacy, and implementing its policies, as Minister of Native Affairs (1950–1958) and then as prime minister (1958–1966). Furthermore, Verwoerd played a vital role in helping the far-right National Party come to power in 1948, serving as their political strategist and propagandist, becoming party leader upon his premiership. He was the Union of South Africa's last prime minister, from 1958 to 1961, when he proclaimed the founding of the Republic of South Africa, remaining its prime minister until his assassination in 1966.
The National Party, also known as the Nationalist Party, was a political party in South Africa from 1914 to 1997, which was responsible for the implementation of apartheid rule. The party was an Afrikaner ethnic nationalist party, which initially promoted the interests of Afrikaners but later became a stalwart promoter and enactor of white supremacy, for which it is best known. It first became the governing party of the country in 1924. It merged with its rival, the SAP, during the Great Depression, and a splinter faction became the official opposition during World War II and returned to power. With the National Party governing South Africa from 4 June 1948 until 9 May 1994, the country for the bulk of this time was only a de jure or partial democracy, as from 1958 onwards non-white people were barred from voting. In 1990, it began to style itself as simply a South African civic nationalist party, and after the fall of apartheid in 1994, attempted to become a moderate conservative one. The party's reputation was damaged irreparably by perpetrating apartheid, and it rebranded itself as the New National Party in 1997 before eventually dissolving in 2005.
General James Barry Munnik Hertzog, better known as Barry Hertzog or J. B. M. Hertzog, was a South African politician and soldier. He was a Boer general during the Second Boer War who served as the third prime minister of the Union of South Africa from 1924 to 1939. Hertzog advocated for the development of Afrikaner culture and was determined to prevent Afrikaners from being excessively influenced by British culture.
Orania is a town located along the Orange River in the Karoo region of the Northern Cape province of South Africa. The town is split in two halves by the R369 road, and is 871 kilometres (541 mi) from Cape Town and approximately 680 kilometres (420 mi) from Pretoria. Its climate is semi-arid.
The Mines and Work Act was a piece of legislation in South Africa, originally passed in 1911, amended in 1912 and 1926 before undergoing further changes in 1956 and 1959. This act legally established South Africa's employment "colour bar." and was enacted to establish the duties and responsibilities of workers in Mines and Works in South Africa.
Female economic activity is a common measure of gender equality in an economy. It is one of the numbers used by the UNDP in the calculation of the Human Development Index, but the numbers themselves are gathered by the International Labour Organization. It is a measure of women over the age of fifteen who are working or able to work as a percent of males. It is one of less accurate statistics gathered and is highly variable with regions and year to year within individual countries.
Chinese South Africans are Overseas Chinese who reside in South Africa, including those whose ancestors came to South Africa in the early 20th century until Chinese immigration was banned under the Chinese Exclusion Act of 1904. Chinese industrialists from the Republic of China (Taiwan) who arrived in the 1970s, 1980s and early 1990s, and post-apartheid immigrants to South Africa now outnumber locally-born Chinese South Africans.
Apartheid was a system of institutionalised racial segregation that existed in South Africa and South West Africa from 1948 to the early 1990s. Apartheid was characterised by an authoritarian political culture based on baasskap, which ensured that South Africa was dominated politically, socially, and economically by the nation's minority white population. In this minoritarian system, there was social stratification, where white citizens had the highest status, followed by Indians and Coloureds, then Black Africans. The economic legacy and social effects of apartheid continue to the present day, particularly inequality.
General elections were held in South Africa on 26 May 1948. They represented a turning point in the country's history, as despite receiving just under half of the votes cast, the United Party and its leader, incumbent Prime Minister Jan Smuts, were ousted by the Herenigde Nasionale Party (HNP) led by D. F. Malan, a Dutch Reformed cleric.
White South Africans generally refers to South Africans of European descent. In linguistic, cultural, and historical terms, they are generally divided into the Afrikaans-speaking descendants of the Dutch East India Company's original settlers, known as Afrikaners, and the Anglophone descendants of predominantly British colonists of South Africa. In 2016, 57.9% were native Afrikaans speakers, 40.2% were native English speakers, and 1.9% spoke another language as their mother tongue, such as Portuguese, Greek, or German. White South Africans are by far the largest population of White Africans. White was a legally defined racial classification during apartheid.
Afrikaner nationalism is a nationalistic political ideology created by Afrikaners residing in Southern Africa during the Victorian era. The ideology was developed in response to the significant events in Afrikaner history such as the Great Trek, the First and Second Boer Wars and opposition to South Africa's entry into World War I.
The Mineral Revolution is a term used by historians to refer to the rapid industrialisation and economic changes which occurred in South Africa from the 1860s onwards. The Mineral Revolution was largely driven by the need to create a permanent workforce to work in the mining industry, and saw South Africa transformed from a patchwork of agrarian states to a unified, industrial nation. In political terms, the Mineral Revolution had a significant impact on diplomacy and military affairs. Finally, the policies and events of the Mineral Revolution had an increasingly negative impact on race relations in South Africa, and formed the basis of the apartheid system, which dominated South African society for a century. The Mineral Revolution was caused by the discovery of diamonds in Kimberly in 1867 and also by the discovery of gold in Witwatersrand in 1886. The mineral mining revolution laid the foundations of racial segregation and the control of white South Africans over black South Africans. The Mineral Revolution changed South Africa from being an agricultural society to becoming the largest gold producing country in the world.
The system of racial segregation and oppression in South Africa known as apartheid was implemented and enforced by many acts and other laws. This legislation served to institutionalize racial discrimination and the dominance by white people over people of other races. While the bulk of this legislation was enacted after the election of the National Party government in 1948, it was preceded by discriminatory legislation enacted under earlier British and Afrikaner governments. Apartheid is distinguished from segregation in other countries by the systematic way in which it was formalized in law.
During the Napoleonic Wars, the Cape Colony was annexed by the British and officially became their colony in 1815. Britain encouraged settlers to the Cape, and in particular, sponsored the 1820 Settlers to farm in the disputed area between the colony and the Xhosa in what is now the Eastern Cape. The changing image of the Cape from Dutch to British excluded the Dutch farmers in the area, the Boers who in the 1820s started their Great Trek to the northern areas of modern South Africa. This period also marked the rise in power of the Zulu under their king Shaka Zulu. Subsequently, several conflicts arose between the British, Boers and Zulus, which led to the Zulu defeat and the ultimate Boer defeat in the Second Anglo-Boer War. However, the Treaty of Vereeniging established the framework of South African limited independence as the Union of South Africa.
South African citizenship has been influenced primarily by the racial dynamics that have structured South African society throughout its development. The country's colonial history led to the immigration of different racial and ethnic groups into one shared area. Power dispersion and inter-group relations led to European dominance of the state, allowing it to directly shape citizenship although not without internal division or influence from the less empowered races.
Racial groups in South Africa have a variety of origins. The racial categories introduced by Apartheid remain ingrained in South African society with South Africans and the governing party of South Africa continuing to classify themselves, and each other, as belonging to one of the four defined race groups. Statistics South Africa asks people to describe themselves in the census in terms of five racial population groups. The 2022 estimates were 81.4% Black South African, 7.3% White South African, 8.2% Coloured South African, and 2.7% Indian South African.
↑ Boshoff, W. H.; Fourie, J. (2020), Boshoff, Willem H. (ed.), "The South African Economy in the Twentieth Century", Business Cycles and Structural Change in South Africa: An Integrated View, Advances in African Economic, Social and Political Development, Springer International Publishing, pp.49–70, doi:10.1007/978-3-030-35754-2_3, ISBN978-3-030-35754-2, S2CID219077517
↑ O'Meara, Dan (19 March 2009). Volkskapitalisme: Class, Capital and Ideology in the Development of Afrikaner Nationalism, 1934-1948. ISBN978-0521104678.
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